Curious Cat: Deming on Management

Deming on the problems with targets or goals

From Dr. Deming's 14 obligations of management: Eliminate numerical goals, numerical quotas and management by objectives. Substitute leadership. As Deming said: "A numerical goal without a method is nonsense." and "Where there is fear you do not get honest figures."

I find something I learned from Brian Joiner (book, 4th Generation Management is a great book for managers) an excellent summary on improvement possibilities - which I remember as: data ("the results") can be improved by:

distorting the system

distorting the data

improving the system (which tends to be more difficult though likely what is desired)

Targets can seriously damage your health by Simon Caulkin:

Targets, claim their defenders, are simple, they provide focus, and they work. Yes, they do. Unfortunately, these are also their fatal flaws. The simplicity is a delusion. As Russ Ackoff put it: 'The only problems that have simple solutions are simple problems. The only managers with simple problems are those with simple minds. Problems that arise in organisations are almost always the product of interactions of parts, never the action of a simple part.'
To focus on the individual parts and ignore the whole always makes things function worse at a system-wide level.
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Deming added: 'Management by numerical goal is an attempt to manage without knowledge of what to do.'

While targets and goals can distract from improvement some guidance is useful. If the desire to is have incremental improvement one strategy may be reasonable but if the desire is to aim for huge improvement another strategy is likely required. In general target are far too specific and overused so as a general rule I am inclined to be biased against targets. However the proper use of "soft" targets (doubling or in the range of 10% for example) to define the scope of an effort make sense.

Like all of Dr. Deming's management concepts, goals, are a part of a system. They interact with the rest of the system. Depending on the existing management system certain inherent problems are magnified and others can be mitigated. If the system has largely eliminated fear and eliminated annual performance appraisals and huge bonuses for meeting numerical targets and a culture of continual systemic improvement exists the risks of distorting the figures and system are reduced. In such a system target will be less harmful than they will given the current situation in most organizations.

What does "arbitrary numerical targets mean"? First arbitrary separates out "facts of life" or realities of business. If we need to sell $5 million or go out of business that is a reality of the situation we face not an arbitrary goal. In addition arbitrary refers to the nature of the goal. Was it set based on new methods that will be used. With the new methods we believe we will receive a 6% reduction in scrap material. That is really a prediction not a target.

Also the numerical target puts the focus on the number not improving the process. If your organization wastes efforts focused on the differences between numbers and goals that is a sign of failure. If focused on the process that is better.

A target has 2 proper uses: 1) to set the scope 2) prediction to evaluate the understanding of the process and measure the success of improvements using PDSA cycle. There are also guesses about future business related to expansion needs. Those are predictions needed for long term planning. That is separate from a target. Once business decisions are based on those predictions then measuring what is really happening is important to gage what reactions might need to be taken. But that is process monitoring and essentially reactive management. When you then take that prediction and turn it into an arbitrary numerical goal that is not helpful. Monitoring progress makes sense and reacting to results makes sense. But that effort should be focused on managing the process and learning (to predict better). Aiming at some number is not productive.